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What is super anyway?

Let’s begin at the beginning. Understand the basics – and what your employer’s responsibilities are.

What is super anyway?

Basically, super is a savings nest egg that you put away until you retire and crack it open. Your employer is required to make regular contributions to your super totalling 10% of your pay or salary. So, all through your working life, it gets topped up so you have enough to kick back and relax in comfort and style when you finally hang up the old work boots for good.

That 10% of your pay is called the Super Guarantee… it “guarantees” your employer will deposit 10% of your salary into the super fund of your choice – regardless of whether you work casual, part-time, or full time. As long as you are 18 and earn at least $450 before tax in the month, it’s your employer’s legal responsibility to pay you super. And that also goes for anyone under 18 who works over 30 hours a month.

Keen to do your own research?
A tool that you might find helpful is the Compare Funds tool. Independent ratings agency SuperRatings provides comparative data on various super funds including some information on investment performance, fees and insurance.
Compare Now

Growing your investment

What’s really great about super is a beautiful thing called compound interest. The money paid into your super account is invested in a variety of ways, a little like the stock market. Every year you earn interest and your investment grows. Those interest earnings are then reinvested again and again and again, and your investment keeps on growing. That’s why it’s important to be in a good performing super fund from a young age. The longer you are with a fund with strong investment performance, the more money you’ll have when you retire.

Retirement is so far away, why should I care about super now?

Well, the money you’re putting away now is your money and your super is likely to be one of your biggest investments in your life. It’s an important part of your future and you should be in control of your future, not leave it up to the payroll person at your first job who puts you in a random fund. Because with new “stapling” laws that are being introduced, your first fund or the fund you are with now could stay with you until you retire - that is, unless you take action.

And trust us when we say, your future self will be very happy with you if you make a smart decision about super now. It could be the difference between retiring in style or just scraping by. 

Choose your own fund

When starting your first job, or if you’ve already started working, take the time to do your research and compare the different funds – then make a decision. Choose the fund that’s best for you, then keep that fund with you. If you change jobs, give your new employer the details of your chosen fund to make sure your super goes where you want it to.

Industry SuperFunds

Nearly five million Aussies are with an Industry SuperFund. Industry funds are run only to profit their members and have a history of above average investment returns*. Industry funds’ fees are also usually on the lower side compared with retail funds, and this is important as high fees can eat away at your balance pretty quickly, especially if you work casual or part-time. You can check out the 13 Industry SuperFunds here.